Hi there,
When you think of running price tests, what comes to mind? Adjusting prices up or down? Maybe testing discount levels?
That’s where most of us start, and it’s exactly the wrong place.
I’ve audited and experimented across a lot of subscription apps, and the pattern repeats: teams jump straight to price points and discount percentages while the foundations underneath are broken.
The test comes back flat, and everyone concludes “pricing isn’t the problem.”
It usually is. They’re just testing the wrong layer.
So in this week’s Convert article, I share the mental model I use: pricing decisions stack like a pyramid. Four layers, each one dependent on the layer below it.
The four layers
Value metric. What are you actually charging for? It sounds like a packaging detail, but it’s the single biggest pricing decision you’ll make. Does it grow with the value customers receive, or punish them for using the product?
Packaging. How your plans are structured. Every extra option at the paywall is cognitive load; every option has to earn its place.
Price point. The actual number, backed by willingness-to-pay research (Van Westendorp, MaxDiff) rather than guesses.
Optimization. Anchoring, urgency, discount framing. Legitimate levers, but they’re refinements, not foundations.
Most pricing problems live in layers one and two. Most pricing tests happen in layers three and four.
That gap is why so many teams run test after test and conclude their users are just price-sensitive. They usually aren’t. The pyramid is just upside down.
In the article, I break down what to test at each layer, why usage-based pricing can quietly drive churn even when the dashboards look great, and how to keep your price tests clean enough to learn from.
Recommendation
This week’s newsletter is sponsored by Convert, an incredible testing platform. If you have the traffic to run A/B tests, it’s a genuinely great tool.
And if you’re pricing an e-commerce store rather than an app, their piece on 5 pricing lessons learned from 500 A/B tests pairs well with this one: real data on which price tests move revenue, and which just add noise.
Most teams don’t have a price-sensitivity problem, they have an order problem. Work the pyramid from the bottom up.
Till next time,
Daphne
Most teams start with the optimization layer because that's often what is within their zone of control. A PM can ship an experiment on a payment flow independently, but to validate a pricing model change requires getting alignment from leadership across product, go-to-market, and finance. You need a leadership team that has a cultural appetite for regular self-disruption to tackle the first two layers.